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February 13, 2012

EU Could Still Fall: Soros

Greek bailout may make no difference

Billionaire investor George Soros says that despite the passage of new austerity measures by Greece, the European Union could still fall to political tensions arising from weak growth and the pressure on countries struggling under large sovereign debt loads.

In a Thursday CNN interview with Fareed Zacharia that aired Sunday, Soros (left) said, “Right now the European Union and particularly the heavily indebted countries face a lost decade. It might actually be longer than a decade because Japan that had a similar situation with the real estate boom and the banking crisis has had now 25 years of no growth.”

He added, “That will create tensions within the European Union, which could destroy the European Union. And that’s a real danger.”

The hard-won vote of approval over the latest austerity measures, said Soros, is “not necessarily going to work in the long run. But it will certainly buy you another six months of quiet on the Greek front.” He was also critical of the way the EU has responded to Greece’s debt crisis, saying, “Greece is a sick situation [that] will continue to be an irritant and a problem for Europe,” and that the EU “mishandled” the crisis.

He added that the EU is no longer the “desirable objective” that it once was, having instead become “more of an imposition.”

Soros also spoke up in support of the so-called “Buffett rule,” saying, “The big boom, the super bubble, really resulted in a great increase in inequity. Now we have the after-effect where you have slow growth one way or the other.” He added, “If you could have better distribution of income, then the average American would actually be better off as a result. But that is totally politically unacceptable.”

However, it is acceptable to Soros, who said, “My tax bill would go up a lot if you had a minimum tax. But I’m willing to pay that because I think if everybody who made as much money as I do gave as much as I do, I wouldn’t advocate it. I think the free riders should also pay.”